Yet Another Chart You Need to See

Pseudo-intellectual publications like Mother Jones are always angling for page views with posts like “Eleven Charts That Explain What’s Wrong With America” and “Overworked America: 12 Charts That Will Make Your Blood Boil.” Even the Atlantic gets in the game with “The Chart That Should Accompany All Discussions of the Debt Ceiling.” Some of these neat little graphs are actually informative; others, like the one talked up by the Atlantic, raise more questions than they answer (e.g. “can you really blame all the Bush tax cuts on Bush when Obama extended them?). Invariably, the pie chart or trend line is used by the author to demagogue about whatever injustice, from income inequality to tax avoidance, has animated him (or her) that day. This chart, from the slightly more sober New York Times, really does speak volumes, however. It’s a shame that it hasn’t gotten the sort of breathless play that Mother Jones gave the blood-boilers.

The gist of the accompanying article, by Floyd Norris, is that companies — what Republicans invariably refer to as “job creators” have never been doing better. Workers, on the other hand, have never been doing worse. The statistics are eye-opening:

In the eight decades before the recent recession, there was never a period when as much as 9 percent of American gross domestic product went to companies in the form of after-tax profits. Now the figure is over 10 percent.

During the same period, there never was a quarter when wage and salary income amounted to less than 45 percent of the economy. Now the figure is below 44 percent.

Furthermore, corporate taxes as a percentage of profits have hit an all-time low of 21 percent. The average, since 1960, is 34 percent. Personal taxes as a percentage of income have also decreased, though by a much smaller amount. They now stand at 14.1 percent of income, compared to an average of 15.1 percent.

This information, which was released by the Commerce Department, puts the lie to the conservative shibboleth that a high taxes are “killing jobs” and preventing companies from expanding. When Rick Perry claims that “the tax structure that we have in place in this country is what drove the masses away,” his rhetoric does not match the facts. And when the Republican members of the deficit-reduction supercommittee argue that the tax increases proposed by Democrats “would kill job creation and economic recovery,” they are ignoring the fact that companies have never had it so good. Surely corporate America wasn’t suffering under Ronald Reagan’s presidency, when taxes took a much larger slice of profits. Even if we take at face value the theory that “business decisions are highly sensitive to the rates of the capital gains, dividends and death tax,” we’re left with the conclusion that lower tax rates have led to . . . less hiring? Fewer jobs? The GOP lambastes President Obama’s economic policy as more of the same, but it really should be asking what it hopes to achieve with more of the same Bush-era tax rates. I’m not going to argue that higher corporate taxes would create jobs, but they would certainly help unemployed and low-income Americans weather the recession. If we’re looking for cash to fund food stamps and Medicaid, perhaps we should heed Willie Sutton’s advice, apocryphal though it may be, and look to banks and other corporations: Because that’s where the money is. This is not Occupy Wall Street-style screed against banks or any other money-making behemoth. Rather, it’s a simple acknowledgement that the people and companies who have done best over the past fifty years can afford to chip in a bit more.

As Times columnist Paul Krugman has repeated ad infinitum, the U.S. economic crisis is not one of businesses stifled by the heavy hand of government; instead, it is primarily a problem of demand. Companies are earning plenty of money; in fact, most large corporations are sitting on record piles of cash. If Apple wanted to open a thousand more stores or Pepsi wanted to build a new bottling plant, a lack of funds or a debilitating corporate tax rate is hardly preventing them from doing so. The real hurdle to expansion is the lack of demand: consumers just aren’t buying. And who can blame them? With wages at an all-time low as a percentage of GDP, it’s no wonder that Americans are reluctant to open their wallets.

Frankly, it’s enough to make your blood boil.

$1 Million in Rick Perry Face Time

The Times reports that Rick Perry has made a $1 million ad buy on Fox News, which will potentially put Perry in red-state living rooms up to seven times a day. Jim Rutenberg writes that “the move is a Hail Mary pass meant to halt any slide from his embarrassing memory lapse at the debate Wednesday and shore up his poll numbers and fund-raising base.”

That Perry has to reassure Fox News viewers — the most loyal of Republican loyalists — while Romney focuses on the general election and throws zingers at Obama, speaks volumes about the divergent states (and fates) of the two campaigns. At the last debate, Romney shied away from frontal attacks on his competitors, instead grabbing every opportunity to bring up the current administration’s failings. Until Perry’s impossible-to-ignore brain-freeze, the former governor of Massachusetts was declining to poke his opponents on the most pokeable of issues, telling the audience in Detroit that Americans could “make their own assessment” of the sexual harassment allegations against Hermain Cain and that “I’m going to focus on my job and my message,” not the (possibly) rising fortunes of Newt Gingrich or Rick Santorum. The Associated Press reports that “[h]e has yet to run his first television ad of the Republican nomination fight.” In another article, the AP suggests that Romney campaigns not as a potential nominee but as “as a presidential candidate” who “often says he collaborated with Massachusetts Democrats to establish a $2 billion rainy day fund by the time he left the governor’s office.” Such a strategy of tacking toward the center is unlikely to win over primary voters unnerved by the legacy of RomneyCare, but it does position him as a viable general election candidate. Indeed, what is now seen as Romney’s biggest weakness — his similarity to Obama — may become his biggest asset should he make it to November 2012.

Perry’s advertising ramp-up also points to a phenomenon potentially more troubling than doubts among the Republican base: a lack of donors. The Times writes that Perry’s “aides said that he has sufficient resources to compete heavily in Iowa, but that he is increasingly turning to donors in Texas to make up for a falloff in national fund-raising.”

For Perry, who was notoriously offended at Michele Bachmann’s suggestion that he could be bought for $5,000 (really, it was more like $30,000), a hit to the pocketbook may be just the wake-up call he needs.

Hypocrisy is Bipartisan

Hypocrisy knows no political party. I happen to think it’s an affliction particularly common among Republicans, but let’s not kid ourselves: If I had a dime for every two-faced statement made by a liberal, I’d still have a 200-foot yacht. If I made the same deal with conservatives, I’d have Paul Allen’s yacht, which reportedly comes with a helipad and two submarines.

The following people (repeat offenders, all) will be making contributions to the yacht fund:

1. Rick Perry.

After claiming that corporations outsource jobs not to save money on wages but “because they were over-regulated,” Perry went on to condemn the bank bail-outs: “If you are too big to fail, you are too big. I don’t care whether you are a country or whether you are a corporation.” The Times writes that “The comments appeared to be a suggestion to either prevent companies from growing so large that failure posed a systemic risk to the economy, or to break up companies that have already grown that large.”

Yeah, that’s called regulation.

2. Occupy Wall Street.

The Guy Fawkes mask popularized by the movie “V for Vendetta” has appeared on numerous anti-Wall Street protesters. The AP reports that, “while Warner Brothers holds the licensing rights to the Guy Fawkes mask, several protesters said they were using foreign-made copies to circumvent the corporation.” More specifically, members of the hacker group Anonymous have imported 1,000 masks from China so that the proceeds go “straight into the pockets of the Anonymous beer fund rather than the Warner Brothers.”

OWS: Anti-corporation, pro-outsourcing jobs. Presumably the college graduates complaining about a lack of jobs haven’t exactly been helped by off-shoring. And presumably the decimation of the manufacturing sector that has squeezed the middle class (sorry, the “99 percent”) is linked to shipping jobs to China. Made in America, anyone?

All the “News” That’s Unfit to Print

Did the muses of journalism go on vacation this week? Was the Arianna Huffington/Tina Brown onslaught just too much for anyone who didn’t sleep through Reporting 101? The battle for this week’s Most Over-Hyped News Story Prize will be a close one. Below, your contenders:

1. In the provocatively titled “Spy games come to New York for UN General Assembly,” the AP suggests that “American diplomats were not caught flat-footed” by Iranian President Mahmoud Ahmadinejad’s anti-U.S. rant to the General Assembly because the United Nations has become “a hotbed of spying and clandestine operations.” Likening the opening of the General Assembly to the Super Bowl of spy games, the AP implies that the American delegation knew in advance that Ahmadinejad would accuse the U.S. of staging the 9/11 attacks. While I have no doubts that the CIA could have (and probably did) wiretap Ahmadinejad’s hotel room, we’re talking about an Iranian nutjob who has been repeating his 9/11 conspiracy theory for several years. He sees Zionist plots behind every potted plant and infamously called for Israel to be “wiped off the map.” The guy has a history of making incendiary speeches at the UN, leading the Times to report on Sept. 22 that “Mr. Ahmadinejad’s remarks provoked what has become a ritual large-scale walkout of delegations, led by the United States.” Spy games? Possibly. But American officials would have to be sleeping on the job — catatonic, really — to not have a standard Crazy Speech rebuttal cued up on their Blackberries.

2. The Washington Post broke the story, if you can call it that, about a racial slur painted on a rock at Rick Perry’s ranch. The property was apparently known, in a more bigoted era, as “Niggerhead.” The controversy hinged on whether the Perry family had acted quickly enough to paint over the offensive word. I am no fan of Rick Perry, but seriously. This is a governor who has been accused of rewarding campaign donors with state “innovation grants,” who shoots coyotes while out for a jog, and who has hinted Texas might secede from the union. Could the Post not come up with anything more salacious than a graffitied boulder?

3. Bloomberg Market’s attempt at an expose of Koch Industries garnered a lot of pre-publication scuttlebutt when a company PR flack issued a rebuttal before even seeing the piece. Unfortunately, the most interesting thing about “Koch Industries Flout Law Getting Richer With Secret Iran Sales” was the convoluted headline, which was ungrammatical even by Bloomberg’s standards. Despite the labor of fourteen reporters (indeed, the article reads as if written by committee), the story reveals nothing but run-of-the-mill environmental violations and mostly resolved legal complaints. It’s not a record to be proud of, but after the BP oil spill and robo-signed foreclosure notices, the bar has been raised for outrage at corporate malfeasance. And the “secret” sales to Iran may have been morally suspect, but illegal? Not at the time. Reaction to the story has been swift and mostly negative; at The Atlantic, Daniel Indiviglio lambastes the Bloomberg reporters for bias, then makes a blatantly biased statement himself: ” I would challenge those same reporters to find many business executives who welcome excessive regulation, unless it manages to give them an advantage over their smaller competitors, as so much regulation does.” Did I mention Indiviglio is a former investment banker?

While the Bloomberg story unsuccessfully (and inappropriately) attempted to link the Koch brothers’ political leanings to their business practices, a short piece in The Nation expertly showcased the hollowness of their libertarian philosophy. The magazine unearthed a 1973 letter from Charles Koch, who has funded “the right-wing attempt to dismantle Social Security and Medicare,” to Friedrich Hayek in which the billionaire urges the free-market economist (and current Tea Party hero) to take advantage of — wait for it — Social Security and Medicare. The Nation writes that the correspondence between “these two major free-market apostles . . . reveal[s] a shocking degree of cynicism and an unimaginable betrayal of the ideas they sold to the American public and the rest of the world.”

4. The Washington Post gets another demerit for an article on Solyndra, the solar-panel manufacturer that defaulted on a $528 million government-backed loan. The Department of Energy’s loan program has since become Exhibit A in the GOP’s attack on “wasteful” government spending. That message is only reinforced by the Post’s sloppy reporting on the so-called scandal. Joe Stephens and Carol D. Leonnig write that DOE was “poised last summer to give Solyndra a second major taxpayer loan of $469 million.” Well, not quite. Taxpayer dollars were not actually loaned to Solyndra; rather, private loans to the company were guaranteed by taxpayer dollars. Essentially, if Solyndra couldn’t pay back its loans, the feds promised to step in to make investors whole. The distinction may seem subtle, given that the government is now on the hook for a half-billion dollars, but it’s an important one. The Post leaves readers with the impression that the money is gone and cannot be recovered, but much of the loan will probably be repaid with the proceeds from the bankruptcy liquidation of Solyndra’s assets — its plant, patents, and other properties. While Stephens and Leonnig use the correct terminology in several cases, referring to a “second loan guarantee” and a “taxpayer-backed loan,” they also describe “the need for more federal money” and neglect to mention that some or all of the money may be repaid. The story’s headline, which announces that “Dept. of Energy was poised to approve $469 million for firm,” paints a picture of Solyndra receiving tax dollars directly from the Treasury. The government will probably lose money on the Solyndra loans, but certainly not the entire half-billion dollars. The loans were, by a design, a risk — after all, if no risk were involved, there would have been no need for a federal guarantee. To give readers the impression that the Solyndra guarantee should have been a completely safe investment distorts the situation and plays into a partisan, anti-government narrative.

5. A (dis)honorable mention goes to last month’s McClatchy story on the impact of regulation on small businesses. Kevin G. Hall’s article attempts to dispel the myth that “excessive regulation and fear of higher taxes” puts a damper on job creation by interviewing “a random sample of small business owners across the nation.” Nearly every person interviewed denies that businesses are hurt by environmental and safety laws. “None of the business owners complained about regulation in their particular industries, and most seemed to welcome it,” Hall writes, raising the question of whether he put together his “random sample” from The Nation’s mailing list. Business owners express appreciation for stimulus money and provide Hall with quotations that could have come from President Obama’s press secretary. “I think the rich have to be taxed, sorry,” one owner says, while another proclaims that regulation is “absolutely, positively not” hurting his bottom line. In an echo of the president’s frequent exhortation for the wealthy to “pay their fair share,” one man reports that “I want to pay my fair share, and I do.” I’m as skeptical as the next left-winger of the Republican claim that regulation kills jobs, but I’m equally as skeptical of a newspaper article in which reality fits so perfectly into the reporter’s story line. Hall never says how he picked his “random sample” of business owners, but in a country split down the middle between Republicans and Democrats, it’s hard to believe that he did not encounter a single small-government conservative. Hall calls the responses to his questioning “surprising,” but what is really surprising is that no one at McClatchy raised an eyebrow when 100% of the interviewees supported its reporter’s thesis. If I don’t believe the GOP when it claims to speak for all “job creators,” then I’m also not about to believe that all businesspeople are bleeding-heart Democrats.

As Goes Texas, So Goes the Country?

Don't Mess With Texas (photo via mediaite.com)

An interesting statement from Rick Perry’s spokesman surfaced today in an article by Alec MacGillis for The New Republic. Defending Perry’s establishment of two “enterprise funds” that disbursed grants to Texas businesses, spokesman Ray Sullivan dismisses criticism that the governor undermined the GOP’s sacred free market by “picking winners and losers” in much the same way that the party has slammed the Obama administration for doing. Sullivan says, “As I think the governor’s made clear, there are things the states can do that the federal government should not do.”

Ah. So it’s wrong for the federal government to back clean-energy initiatives, but everything’s dandy when Texas decides to subsidize clean-coal technology to the tune of $3.6 million dollars. MacGillis also points out a pattern of grant money ending up in the hands of Perry donors: “Often, the dynamic seemed quite obvious: After Joe Sanderson received a $500,000 Enterprise Fund grant to build a poultry plant in Waco in 2006, he gave Perry $25,000.” If not an outright example of what Michele Bachmann would call “crony capitalism,” it’s an awfully big coincidence. Even if there was no explicit quid pro quo, I’m not sure how I feel about executives writing $25,000 thank-you notes to elected officials.

The best thing about Sullivan’s statement, however, is its similarity to an oft-repeated line from another politician, this one not so beloved by Rick Perry: “Our plan was a state solution to a state problem and his is a power grab on the federal government.” Or how about this one: “We were able to do in our state something which is not being done in Washington.” Yes, folks, that’s Mitt Romney on health care reform in Massachusetts, known to Perry as “RomneyCare” and former presidential candidate Tim Pawlenty as “ObamneyCare.” Romney’s sticking to his guns, as much as a person can stick to their guns while backpedaling furiously. The individual mandate: great for Massachusetts . . . bad for America. If you’re looking for proof that Romney really isn’t sure where he stands on the issue, take a look at the page on his website titled “RomneyCare — The Truth About Massachusetts Health Care”:

Romney’s stance on health care: still under development.

There are other examples of Perry’s reluctance to apply the Texas Doctrine to the rest of the country. Indeed, the premise of MacGillis’s article is that Perry is “The Permanent Candidate,” someone who backed Al Gore for president in 1988 and switched parties only when he wanted to run against a Democratic agricultural commissioner. MacGillis quotes a former state legislator who served with Perry in the 1980s as saying that “I’m not sure you can ever ascribe a real philosophy to Perry. He can switch colors to whatever he needed to be.”

In a Mitt-esque backflip, Perry is for allowing undocumented immigrant students to pay in-state college tuition, but against the federal DREAM Act, which would offer similar benefits nation-wide. (Granted, the DREAM Act also includes a path to citizenship, which Perry dismisses as “amnesty.”) He may believe only someone without a heart would deny immigrant children an education, but there isn’t much heart in this recent press release, which could have been taken verbatim from any Republican playbook: “Gov. Perry opposes amnesty and the federal DREAM Act. Washington must first secure the border before we can have any rational discussion about immigration reform.”

But despite the policy swings that MacGillis details in his article, Perry is otherwise dismally consistent. He pretty much comes down on the side of “Great for Texas . . . Great for America.” Repealing environmental regulations? Check. Minimum wage jobs? Check. Making government “as inconsequential as possible” in our lives? Another check.

Mitt Romney can attest to the danger of letting voters smell a flip-flopper. Americans turn up their noses at perceived spinelessness; it is not a politician’s prerogative to change his or her mind, no matter how serious or well-reasoned the decision. Just ask John Kerry, who voted for that $87 billion in war funding before he voted against it — and never lived it down. On some issues — evolution, global warming, religion in the public sphere — it might be nice to see Rick Perry flip and flop a bit more. If he does end up in the Oval Office, though, one has to wonder what he’ll do with all that intoxicating executive power. Who knows — the man whose mission it is to “reduce the scope and size of government that has gotten too big and intrusive” may well do the ultimate about-face.